The world’s rich nations miss a golden opportunity to back fair trade
Level 2 |
Intermediate
The world's rich nations miss a
golden opportunity
to back fair trade
George Monbiot
I
n a spe ech in Octo ber 200 1, t he Britis h Prim e Mi nister , T ony Blair , su ggest ed t hat t her e wo uld b e a radic al cha nge of p olicy
on Africa."The current state of
Africa",he said, "is a scar on the
conscience of the world. But if the
whole world focused on it, we could
heal that scar. And if we don't focus on
it, it will become deeper and angrier."
So I would like to ask Britain's prime minister
to explain his actions at the G8 summit in
France last week. A few weeks
ago President
Jacques Chirac did something amazing. After
years of opposing any changes to European
farm subsidies, he approached the US
government to suggest that Europe would
stop subsidising its exports of food to Africa if
America did the same.
This was an important offer, not only
because it represented a significant
change of policy for France, but also
because it provided an opportunity for
both the European Union and the US to
abandon their constant attempts to offer
higher agricultural subsidies than each
other. As Blair has pointed out, the West’s
agricultural subsidies are a disaster for
the developing world, and particularly for
Africa. Farming accounts for some 70% of
employment in Africa, and most of the
farmers there are extremely poor. Part of
the reason for this is that the prices of
products grown by African farmers are
unfairly undercut by the subsidised
products dumped on their markets by
exporters from the US and the EU.
So we might have expected Blair to have
welcomed Chirac’s initiative. Instead the
prime minister single-handedly destroyed it.
The reason is, of course, familiar. George
Bush receives a great deal
of political
support from US agro-industrialists, grain
exporters and pesticide manufacturers, and
he was not prepared to match Chirac's offer.
If the EU, and in particular the UK, had
supported France, it would have been difficult
for Bush to oppose the idea. But as soon as
Blair made it clear that he would not support
Chirac's plan, the initiative was dead.
So, thanks to Mr Blair and his habit of
doing whatever Bush tells him to, Africa
will continue to suffer. The basic problem
is that the rich nations fix the global trade
rules. The current world trade agreement
was supposed to have prevented the EU
and the US from subsidising their exports
to developing nations. But the agreement
contains so many loopholes that it permits
the US and the EU simply to call their
export subsidies by a different name.
The EU has stopped paying farmers for what
they produce and started instead to give them
direct grants, based on the amount of land
they own and how
much they produced there
in the past. The US does the same and has
also introduced some new tricks. One of
these is called "export credit": the state
reduces the cost of US exports by providing
cheap insurance for the exporters. These
credits are worth some $7.7bn to US grain
sellers. This money ensures that American
exporters can undercut the world price for
wheat and maize by between 10% and 16%,
and the world price for cotton by 40%.
But the worst of its
hidden export subsidies
is its use of international aid as a means of
entering the markets of poorer nations.
Other countries give money and the World
Food Programme can use this money to
buy supplies in local markets, which helps
local farmers at the same time as feeding
starving people. The US, on the other
hand, sends its own subsidised food
instead of money, saying that this
programme will "develop and expand
commercial markets for US products".
The result is that the main recipients of food
aid are not the countries which need it most,
but the countries that can, in the words of the
US department of agriculture, "demonstrate
the potential to become commercial markets"
for US farm products. So the Philippines
currently receives
more US food aid than
countries like Mozambique, Malawi, Zambia
and Zimbabwe, which are suffering from
serious
food shortages, while the Philippines
is not.
US policy also ensures that food aid is
delivered just when it is needed least. When
the price of wheat falls, the volume of "aid"
rises. This is a clear example of agricultural
dumping. The programme that is meant to
help the poor is in fact making them poorer.
Blair’s choice was
to help save Africa or to
help save George Bush from a mild
diplomatic embarrassment. As usual, he did
what his master ordered and supported
Bus
h. The scar on the world’s conscience
has just become deeper and angrier.
The Guardian Weekly
20-3-03, page 13
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